PDA

View Full Version : David Stern: The NBA lost $370 million last season



JordansBulls
07-18-2010, 11:30 PM
http://blog.seattlepi.com/davidnelson/archives/214349.asp





According to NBA Commissioner David Stern, the NBA lost about $370 million in the 2009-2010 NBA season.

This reported loss was good news to the NBA's ears seeing that they expected to lose more money this season. Stern was expecting to lose $400 million this year, and also stated that the NBA has lost at least $200 million a year for the four previous years.

According to my math, the NBA has lost over $1 billion dollars in the past 5 years.

According to MSNBC, many teams are losing money by the "barrel," to include the Oklahoma City Thunder.

That may be great news for Seattle Supersonics fans still feeling burnt.

If the NBA owners and player's union don't reach an agreement with the collective bargaining agreement that expires after next season, the NBA could lockout on July 1st, 2011. Insiders and experts are anticipating a lock-out which would delay training camps and possibly the season.

As a Sonics fan, and not a financial economist, I'm not going to lose sleep over this; rather, I'm slightly happy that the league that not only allowed our Seattle Supersonics to be taken from us, but also fought for our team to be taken from us, is in deep financial trouble.

The NBA's business model is broken. Teams are losing money by the "barrel," while offering players $80-100 million contracts.

Currently, Kobe Bryant is the highest paid player at $24.8 million per season.

Who's the second highest player in the league? Former Seattle Sonic, Rashard Lewis at $20.5 million per season.

Nothing against Rashard, but is he the second most talented or valuable player in the league? Probably not, but he's the highest paid player on the Orlando Magic ahead of Vince Carter's $17.3 million annual salary and the face of Orlando Magic, Dwight Howard's measly $16.5 million annual salary.

Want to see why the NBA is in deep financial trouble? Check out the top NBA team and player salaries here.

But then again, why do I care? My team is gone and the NBA doesn't want to be in our city anymore.

Wade>You
07-18-2010, 11:31 PM
Owners are crying over the mistakes they make and want the players to pay for them.

Yeah, not gonna happen. Stop hiring the Otis Smith's of the league to run your team.

prash
07-18-2010, 11:43 PM
Some owners win and make money others lose. If Seattle still had the same team that is in OKC right now I guarantee that they wouldn't be losing money financially.

NBA owners who moved the team there deserve to lose their money. What kind of market did they think they were moving the team to?

plpfctn
07-19-2010, 12:02 AM
that's what you get when you have teams in small markets like sacto, okc, utah and memphis

asandhu23
07-19-2010, 12:05 AM
that's what you get when you have teams in small markets like sacto, okc, utah and memphis

Sactown fans are actually pretty loyal fans. 2002 playoffs proved that. this year their fan base numbers will go up again.

carter15
07-19-2010, 12:21 AM
It's hard to throw out random teams like you guys are. If anything try and find a profit/loss amount per team. Then it can be analyzed as to what markets are really hurting the league.

plpfctn
07-19-2010, 12:28 AM
Sactown fans are actually pretty loyal fans. 2002 playoffs proved that. this year their fan base numbers will go up again.

it's not about the fanbase, it's about the city's market. no matter how good the team is, ticket prices and local tv contracts will be lower than a team in a large market like NY, LA, Chi even if those teams stink. There's a reason why MLB or NFL would never go there.

Vidball
07-19-2010, 12:31 AM
I'm sure the NBAPA will dispute this amount. It's in the league's best interest to hike up the said amount of money lost in order to secure a better CBA. That's an average loss of $12M per team...I wonder what kind of salaries the owners pay themselves on their payroll. That alone probably would bring that $370M number near Zero.

avrpatsfan
07-19-2010, 12:34 AM
It's the owners fault that the bad deals exist, not the players fault.

MaHaRaJaH
07-19-2010, 12:43 AM
it's not about the fanbase, it's about the city's market. no matter how good the team is, ticket prices and local tv contracts will be lower than a team in a large market like NY, LA, Chi even if those teams stink. There's a reason why MLB or NFL would never go there.
This

Season cover only 60% of the revenue they should bring

Mudvayne91
07-19-2010, 12:52 AM
All the points made above are valid, but I wonder if the credibility the nba is a contributing factor. I'm not saying its rigged, but there are several out there that believe on some level it is. If there's questions about the integrity of the game, I could see the nba taking a hit financially. Just throwing it out there.

jaded01
07-19-2010, 02:03 AM
okc just moved. takes time to get everything settled. the oklahoma fans are loyal... they will come out for games. but yes, the cap is too high and owners are way too stupid. they blow **** tons of money on terrible players and build franchises in financially unstable areas.

ChiSox219
07-19-2010, 02:06 AM
Why did the salary cap go up?

THE MTL
07-19-2010, 02:08 AM
I think its because of the SALARY CAP we are having these problems!!! NBA needs its BIGGEST markets to be the best teams and for the past decade CHICAGO and NEW YORK havent done ANYTHING!!!!

MLB never had a cap and the Yankees and Red Sox spend almost 200 million per year in salaries.

NFL had hard cap and JUST GOT RID of it! But even with the cap, the loophole was giving player's sign-on bonuses. Thus allowing huge markets like Philly, Dallas, and New York the ability to spend.

NBA needs to allow its good teams to SPEND! Yes, its unfair....but 370 million lost last year when you had the most watched basketball games (Lebron vs Celtics Game 6 & Lakers/Celtics Fina series) since Michael Jordan is pathetic!!!!

Sandman
07-19-2010, 02:10 AM
when is the nba going to lose david stern?

Kyle N.
07-19-2010, 02:23 AM
it's not about the fanbase, it's about the city's market. no matter how good the team is, ticket prices and local tv contracts will be lower than a team in a large market like NY, LA, Chi even if those teams stink. There's a reason why MLB or NFL would never go there.

Indianapolis, Charlotte, Nashville, Kansas City, Milwaukee, Cincinnati, New Orleans, Buffalo, and Green Bay are all smaller markets than Sacramento. Somehow I don't think that's the reason.

Wizard of O's
07-19-2010, 02:28 AM
Why did the salary cap go up?

because David Stern is full of it.

-Kobe24-TJ19-
07-19-2010, 05:52 AM
I think its because of the SALARY CAP we are having these problems!!! NBA needs its BIGGEST markets to be the best teams and for the past decade CHICAGO and NEW YORK havent done ANYTHING!!!!

MLB never had a cap and the Yankees and Red Sox spend almost 200 million per year in salaries.

NFL had hard cap and JUST GOT RID of it! But even with the cap, the loophole was giving player's sign-on bonuses. Thus allowing huge markets like Philly, Dallas, and New York the ability to spend.

NBA needs to allow its good teams to SPEND! Yes, its unfair....but 370 million lost last year when you had the most watched basketball games (Lebron vs Celtics Game 6 & Lakers/Celtics Fina series) since Michael Jordan is pathetic!!!!

Knicks salary 3 seasons ago was over 120 millions:facepalm:

hyb152
07-19-2010, 08:35 AM
when is the nba going to lose david stern?

I have the same question.... the nba is so obviously tarnished. It's rigged. It's all about the dough.... money talks.

TC119
07-19-2010, 09:06 AM
It doesn't help that everytime the NBA pushes a player to be it's face for the league, they screw up... Kobe, Iverson, now LeBron with his defection, Kobe again.. honestly how can anyone identify with these guys? Then there's a guy like Tim Duncan, the league doesn't push him, but the Spurs are a disaster for ratings and neutral fans.

The league should start by getting rid of David Stern, that would be a good start, the owners should stop throwing 20 million a year at guys like Joe Johnson and Rashard Lewis... Get some real officials too.

rapjuicer06
07-19-2010, 10:38 AM
dwight howard and kevin durant should be the faces of the league. stern does suck some major nuts and needs to be gone...basketball just isn't even close to what it was back when jordan was playing, or back when it was kobe and shaq. and its going to be EVEN worse now that lebron, wade and bosh are playing together. no one is going to really watch. every team needs a superstar now, and when the superstars start coming together and go to the same team, people are going to lose even more interest

GSW Hoops
07-19-2010, 11:58 AM
A poor economy is going to translate into losses for businesses, especially entertainment/leisure like the NBA. If you can't pay your mortgage, you probably aren't going to shell out $200 to take the family to an NBA game.

Hard for me to feel bad about asking an owner or player to take a paycut, because they'll still be earning millions per year respectively.

NBA arenas are empty, and the players and owners both need to take a financial hit to make things work.

Hard for owners to make a case that they're broke then Rashard Lewis is making $20 million per year.

mikantsass
07-19-2010, 12:04 PM
Indianapolis, Charlotte, Nashville, Kansas City, Milwaukee, Cincinnati, New Orleans, Buffalo, and Green Bay are all smaller markets than Sacramento. Somehow I don't think that's the reason.

You cant compare the NFL to the NBA

Barracuda
07-19-2010, 12:13 PM
Lock out is imminent

whynotus
07-19-2010, 12:20 PM
thats why the NBA is headed to a LOCKOUT

masalex1205
07-19-2010, 12:21 PM
So the owners are losing that much money yet are still giving guys like Channing Frye and Drew Gooden big long term contracts? Id like to see the player's association's take on this.

Also, I know that David Stern bashing is the cool thing to do these days but you have no idea what you're talking about if you think Stern is a bad commissioner. Do a little research before you say something like that and don't rely on, "Stern fixes the lottery" or "Stern picks which teams will play each other in the playoffs."

lpdunks8
07-19-2010, 12:30 PM
I believe a big issue is that marginal players are getting huge deals. When you look at the new contracts of people like Amir Johnson and Darko, you can see how teams lose money.

With regard to people saying the game is rigged, the NBA could commission a scientific pole to see if many believe in conspiracy. If it turns out they do, the NBA could launch an education campaign. Simple instruction on how it wouldn't be financially intelligent to "let" the Spurs win mutliple titles (terrible ratings and interest). They could also say, "if we rig this thing, why are the Knicks so bad?". If I'm rigging something, the Lakers would be playing the Bulls, Knicks, or Celtics in the finals almost every year.

Finally, on the Miami points. The Heat are going to pack arenas this year. The good and bad fallout of the big 2 and 1/3 (Bosh...lol) coming together is that they will be a traveling circus. Ratings will go through the roof.

CostanzaNumba0
07-19-2010, 12:42 PM
The league will continue to suffer until they get rid of their cap structure, no athlete with the money they make in a single season should be guaranteed contracts, take the knicks for example, one bad deal (allan houstons contract) literally crippled the franchise for a decade. There are a ton of NY haters on here but this league cannot survive with the knicks and chicago being first round exits or lottery teams for so many consecutive seasons, in ny the nba is almost as dead as hockey and thats a damn shame

Raoul Duke
07-19-2010, 01:10 PM
I don't believe any of it. Golden State just sold for upwards of 450 million dollars. Amir Johnson got a 34 million dollar contract.

They made their bed, and as far as I'm concerned they can lay in it.

Raoul Duke
07-19-2010, 01:13 PM
So the owners are losing that much money yet are still giving guys like Channing Frye and Drew Gooden big long term contracts? Id like to see the player's association's take on this.

Also, I know that David Stern bashing is the cool thing to do these days but you have no idea what you're talking about if you think Stern is a bad commissioner. Do a little research before you say something like that and don't rely on, "Stern fixes the lottery" or "Stern picks which teams will play each other in the playoffs."

How's about "Stern extorts state governments into building him new arenas"?

JordansBulls
07-19-2010, 02:50 PM
Knicks salary 3 seasons ago was over 120 millions:facepalm:

That's because they were spending 20 million a year on a guy in Allan Houston who was retired.

Jays Claw
07-19-2010, 02:57 PM
I find it absurd that NBA owners want the players to pay for their fincancial losses.

-Kobe24-TJ19-
07-19-2010, 03:01 PM
That's because they were spending 20 million a year on a guy in Allan Houston who was retired.

Isiah and Knicks overpayed everyone in the organisation including janitors.

tcav701
07-19-2010, 03:15 PM
Contract structures are way too player friendly and put organizations in tough spots. The NBA is the only league where teams trade for contracts rather than players. Its an absolute joke that all this money is gauranteed to a player and then they can play like crap, have off the court issues or retire and the team takes the hit.

tangent12
07-19-2010, 03:16 PM
http://img829.imageshack.us/img829/1253/sternlied.jpg

JordansBulls
07-19-2010, 11:47 PM
Contract structures are way too player friendly and put organizations in tough spots. The NBA is the only league where teams trade for contracts rather than players. Its an absolute joke that all this money is gauranteed to a player and then they can play like crap, have off the court issues or retire and the team takes the hit.

NBa needs to do what the NFL does and have non guaranteed contracts unless you play.

*Superman*
07-20-2010, 12:13 AM
So they had to team LeBron, Wade and Bosh together? Bastards.

Nirvanaskurdt
07-20-2010, 12:25 AM
:bs:

TopsyTurvy
07-20-2010, 01:16 AM
Forbes has predicted that only some 12 franchises lost money this past season back in January and that the marquee franchises made +$50 MIL. Then there's the part where the union demands to factor out interest and depreciation, which in accounting terms makes sense on a certain level.

The truth is in the middle somewhere, and though the league was predicting attendance to drop, that was hardly the case at all. On top of that, the Warriors were sold for the NBA record of some $450 Mil - which is good news for any other owners looking to get out of the league and even better news for fans.

I really feel for Seattle fans, but the move was far more political than anything else.

dimedrpr
07-20-2010, 04:41 AM
The league will continue to suffer until they get rid of their cap structure, no athlete with the money they make in a single season should be guaranteed contracts, take the knicks for example, one bad deal (allan houstons contract) literally crippled the franchise for a decade. There are a ton of NY haters on here but this league cannot survive with the knicks and chicago being first round exits or lottery teams for so many consecutive seasons, in ny the nba is almost as dead as hockey and thats a damn shame

This is one of the smartest things I've seen said on PSD in awhile.

Now, I'm sure that the Knicks, being the geniuses that they are, probably would have taken the money they were paying to Allan Houston and just given it to some bumb like Eddy Curry, oh wait, I mean Steph "i'm on webcam with no shirt on losing my mind" Marbury, oh wait, I mean Stevie Francheist, umm, Tmac?, Jerome James?....I digress.

Anyhow, I completely agree that guaranteed contracts are terrible for the NBA. As greedy and full of **** as the owners are, they really need to get player salaries under control. Teams like the Hawks really **** themselves though when they pay max money to Joe Johnson. I mean they are paying max dollars to a player who isn't going to fill seats or put them in the NBA Finals. Now, if you have a player like KD or Kobe it's understandable to pay the max money. Those guys are going to fill your arena every night and take you on deep runs into the playoffs which means more gate revenue. Everyone knows that playoff tix cost more and the more playoff home games you have, the more money you make.

Also, you have to factor in teams that have owners who are super wealthy and are more than willing to go over the cap every year which usually will cause them to be in the negative when it comes to profit margins. This tilts the curve for the average team loss figure. If team A is breaking even and team B (Blazers for instance) are losing $24 mill, then average between those two teams is net loss of $12 mill per team. So not all teams are really losing that much money and some of the teams who are losing money are doing it with the knowledge of how to stop it but no desire to do so.

If you tell me that the Knicks, Blazers, Mavericks, Magic, and Hawks are losing money then I have no sympathy for them. Do you know why the Royals have one of the lowest payrolls in the majors every year? It's because they know that they aren't going to bring in enough revenue to match the Yankees, Sox, Angels, etc. The difference in the NBA is that the owners of the small market teams still spend the same amount of money as the large market teams and then wonder why they are losing their shirts. How in the world are the Magic supposed to make enough money in that market to pay Howard, Carter, and Lewis with their huge salaries? Irresponsible spending is what's killing the league. If max contracts only went to top teir players who filled arenas, sold jerseys, and won rings then the league would be much better off.

heathonater
07-20-2010, 05:48 AM
I think its because of the SALARY CAP we are having these problems!!! NBA needs its BIGGEST markets to be the best teams and for the past decade CHICAGO and NEW YORK havent done ANYTHING!!!!

MLB never had a cap and the Yankees and Red Sox spend almost 200 million per year in salaries.

NFL had hard cap and JUST GOT RID of it! But even with the cap, the loophole was giving player's sign-on bonuses. Thus allowing huge markets like Philly, Dallas, and New York the ability to spend.

NBA needs to allow its good teams to SPEND! Yes, its unfair....but 370 million lost last year when you had the most watched basketball games (Lebron vs Celtics Game 6 & Lakers/Celtics Fina series) since Michael Jordan is pathetic!!!!

i think the problem is people in this country have grown to love football more and more each day. this year's super bowl, featuring relatively small markets, brought in huge ratings. the markets have less to do with the problems in the nba than the fact that people are less satisified in the product being put out there in an nba court.

_Supreme_
07-20-2010, 05:57 AM
And yet the salary cap went up, which only happens if revenue goes up.

I don't know the exact calculations used (to calculate the cap*) & finance details, but if they lost (about) $200M the years previous to last, and $370M last season, then the cap going up doesn't appear to make sense.




* The NBA salary cap is calculated the exact same way each year, and is linked to the League's revenue of the previous year.

tmacsc2
07-20-2010, 06:49 AM
how much profit did they still make? ill bet you they lost that much of the profit they made the year before

dimedrpr
07-20-2010, 06:58 AM
i think the problem is people in this country have grown to love football more and more each day. this year's super bowl, featuring relatively small markets, brought in huge ratings. the markets have less to do with the problems in the nba than the fact that people are less satisified in the product being put out there in an nba court.


I won't argue that the NFL isn't more popular than the NBA because everyone knows that the NFL is the top dog. Of course that also has a lot to do with gambling and fantasy football but still. It's also a fact though that it is easier to get people to come to 8 games a year on Sunday afternoons than 41 games a year. Who really wants to go to a Clips vs Minni game on a tuesday night when they've been working all day and then have to battle traffic after work to get there.

Baller1
07-20-2010, 12:44 PM
Good, **** you Stern. You deserve to lose everything you have.

kblo247
07-20-2010, 01:24 PM
Anyone who expects the NBA players to accept non-guaranteed money is kidding themselves when they play back to back, 3 games in 4 nights, and travel around more than the NFL without bye weeks.

They won't do it, and they shouldn't have to do. They also shouldn't bail the owners out for paying out their ***** like fools. If you don't want to be in debt, don't spend above your means. It is that simple.

The league would be in a better place though probably financially for most owners if they didn't have to pay the luxury tax and were just given a hard salary cap at about $100mil that they couldn't go over.

ewells20
07-20-2010, 01:58 PM
You know, the good thing about the NFL, and even the NHL is the level of competitiveness that each league provides. Lets look at the last couple of years. In the NFL, who would have ever expected the Arizona Cardinals to compete for a Super Bowl, let alone almost win it. In the NHL last season, a 7th and 8th seed took out the top two seeded teams and the 7th seed went to the Stanley Cup finals. Even in baseball recently, the St Louis Cardinals with 83 wins managed to beat two teams in the 7 game series.

I think the problem in the NBA and why fewer and fewer people are watching is the competitiveness of the games, especially in the playoffs. When was the last time lower seeded teams actually competed. The difference in talent between an 8th seed and a 1 seed is too great to over come. It is just to rigged, too predictable and boring until there is that one good series. And some teams like Min, Tor, Mil will never be strong competitors and some teams like LA and Bos will always be competitors. Thats why I like the NFL, and the NCAA. Money and markets are less of a factor in those sports

Raoul Duke
07-20-2010, 02:04 PM
The most convincing argument in this thread was by the person who pointed out how trades in the NBA usually have way more to do with contracts than they do talent. You don't see that nearly as often in any of the other major sports leagues.

The current CBA doesn't work, but neither does the current business model for an NBA franchise. Both sides (owners and players) are going to have to be a lot less greedy if they want to compare favorably with the NFL.

Bruno
07-20-2010, 04:32 PM
How can the NBA possibly lose that much money? How do you **** something as profitable as the NBA up?

beasted86
07-20-2010, 06:09 PM
The Thunder were the 12th highest team in attendance, with 98.9% capacity... went to the playoffs and had a winning season.... and had a roster that was just under the cap... and still weren't a profitable team. :pity:

These small markets are killing to league. It's time to either contract teams like the Grizzlies, Kings, and Pacers... or Stern should pressure on the owners to move.

SundaeBest
07-20-2010, 07:18 PM
I think its because of the SALARY CAP we are having these problems!!! NBA needs its BIGGEST markets to be the best teams and for the past decade CHICAGO and NEW YORK havent done ANYTHING!!!!

MLB never had a cap and the Yankees and Red Sox spend almost 200 million per year in salaries.

NFL had hard cap and JUST GOT RID of it! But even with the cap, the loophole was giving player's sign-on bonuses. Thus allowing huge markets like Philly, Dallas, and New York the ability to spend.

NBA needs to allow its good teams to SPEND! Yes, its unfair....but 370 million lost last year when you had the most watched basketball games (Lebron vs Celtics Game 6 & Lakers/Celtics Fina series) since Michael Jordan is pathetic!!!!

Sorry but I don't agree. 8 games should NEVER offset what a league would make on average; based of 82 games for every team, plus sales revenues and tv contracts. That is ridiculous.

Also, the major problem is NOT the cap. It's the very small talent pool. One example: Amare is not a max contract guy. But BECAUSE the talent pool is so small, and the league is spread so thin, then you are going to get these ballooned contracts.

The small talent pool also explains the "star treatment" that players get. I'm not saying the Kobe's and Dwades of the league don't merit some star treatment. But EVERY team in the league has players that are given preferential treatment, when they clearly aren't stars. Games are also purposely called in a way to minimize blowouts on a continuous basis. IMO, this is a clear attempt to inflate the amount of talent the league has, because they are AWARE of how thin actual stars are spread out.

Eliminating the salary cap would just create a free-flowing sea of free-agents. That is quite possibly the thing I hate the MOST about baseball. I like teams that are identifiable by things other than their jerseys. Players synonymous with their franchise are a great thing. Think Kobe Bryant, Michael Jordan, Dwade; whether you love or hate these guys, when you think of their teams you think of them.

The NBA in my opinion should contract, or at the very least, not expand anymore.

dimedrpr
07-20-2010, 10:20 PM
The Thunder were the 12th highest team in attendance, with 98.9% capacity... went to the playoffs and had a winning season.... and had a roster that was just under the cap... and still weren't a profitable team. :pity:

These small markets are killing to league. It's time to either contract teams like the Grizzlies, Kings, and Pacers... or Stern should pressure on the owners to move.

The Thunder are new to the area though. They will sell more jerseys, generate more ad dollars, raise ticket prices, etc. as time goes on as long as they continue to be successful. Ticket prices are pretty low in OKC right now but that's because they have to build the brand right now. The team was awful under PJ when they first got here so if the ticket prices were high and the product sucked, people would have stopped going as soon as the newness wore off. The team will make more money in the next few years even with the team salary rising.

JordansBulls
07-21-2010, 01:10 AM
Anyone who expects the NBA players to accept non-guaranteed money is kidding themselves when they play back to back, 3 games in 4 nights, and travel around more than the NFL without bye weeks.

They won't do it, and they shouldn't have to do. They also shouldn't bail the owners out for paying out their ***** like fools. If you don't want to be in debt, don't spend above your means. It is that simple.

The league would be in a better place though probably financially for most owners if they didn't have to pay the luxury tax and were just given a hard salary cap at about $100mil that they couldn't go over.

100 million is too much. I think 75 is more reasonable.